This application relates generally to systems and methods for electronic payment devices. More specifically, this application relates to systems and methods for providing a multi-use device to consumers for executing electronic payment transactions.
Over the past decades, new technology has caused a significant shift in point of sale (POS) transactions away from cash and checks and towards electronic payment devices. Consumers have found added convenience with devices like credit cards, debit cards, and stored-value cards.
Credit and debit cards typically comprise a standard-sized plastic card with a magnetic stripe, or magstripe. These magstripes store a large amount of information, including account number, country code, account holder name, expiration date, and other discretionary and proprietary data. Most POS's which accept credit and debit cards have magstripe readers, which read the information from the magstripe. The reader then communicates the information to the appropriate financial institution to verify and complete the transaction.
More recently, financial institutions began offering “stored value” cards, or “electronic purse applications.” With these cards, a cash equivalency is stored on the card, rather than the card being linked to an account. Value may be added to the card either by transferring cash or by transferring money from a financial institution, at a kiosk, automated teller machine (ATM), by phone, or by some other means. Because the cards carry only a specific cash equivalence, cardholders may better limit their susceptibility to large unauthorized transactions. Further, because the cards are not associated with financial accounts, merchants may incur lower processing fees for handling transactions with stored value cards.
Stored value, gift, or other pre-paid metered payment devices in various forms have become increasingly popular for the purchase of goods and services and even telephone services. The sale of these cards as promotional goods has similarly increased in recent years. This growth has resulted in a multi-billion dollar electronic payment device industry.
Still, current electronic payment devices tend to have at least two inherent issues. The first issue involves convenience. Electronic payment devices are typically delivered to consumers in the form of a separate electronic payment instrument (e.g. a card sized for a wallet or keychain). As a result, consumers must constantly carry the device around for use in electronic payment transactions.
The second issue results from the fact that electronic payment devices are often susceptible to physical, electromagnetic, or other types of exposure. One result is that magnetic exposure and scratching can destroy the information stored on a magnetic stripe, and electromagnetic exposure can destroy the information stored on a radio-frequency transceiver. Another related result is that exposed magnetic stripes and transceivers can expose the information stored on them, allowing unauthorized appropriation of that often-private information.
Thus, it may be desirable to offer consumers electronic payment devices which are convenient to carry and easy to use for payment, while being better protected from harmful exposure.